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Naming & Numbering of Oil and Gas Wells

A short explanation of how well names and numbers are determined in Michigan.

A. Well Names

Wells are traditionally named for the mineral owner(s) in the drilling unit. [e.g. Smith or Smith & Jones]

In the case of many mineral owners who have small parcels in the drilling unit, "et al" may be added to the primary mineral owner(s). [e.g. Smith et al or Smith & Jones et al]

If the State owns minerals in the drilling unit, the well name shall be "State" followed by the name of the township where the well is located [e.g. State Chester]. With State and private minerals, State and the township always comes first followed by the private owners. [e.g. State Chester & Smith et al]

If the Federal government owns minerals in the drilling unit, the well name shall include "USA" followed by the name of the township where the well is located [e.g. USA Hillman] If State ownership is involved, the word "State" comes between "USA" and the township name. [e.g. USA State Hillman]. Any private ownership comes last. [e.g. USA State Hillman & Smith et al].

If the minerals in the drilling unit are not owned by Federal or State governments, "USA" or "State" shall not be part of the well name.

In the case of an Antrim Uniform Spacing Plan (USP), USA or State, with township name, should only be used if the bottom hole location (BHL) is actually located on the quarter quarter sections which includes the Federal or State minerals.

Summary:

· Well name requirements: If the drilling unit contains Federal or State minerals, the well name shall be USA and/or State (Township). If there are private minerals also, the mineral owner's name should be added.

· Be as brief as possible.

· In the case of private minerals, it is recommended that the well name = mineral owner(s).

Mineral Owner(s)

Well name

Federal

State

*Private

X

USA Bagley

X

X

USA State Bagley

X

X

X

USA State Bagley & Smith (or et al)

X

State Bagley

X

X

State Bagley & Smith (or et al)

X

Smith

*If the well has been plugged, a re-entry name may reflect the current mineral owner which could be different than the original well name.

More recently, well numbers have reflected the sequence of wells drilled in each section [e.g. 1-10-, 2-10, 1-23 etc.] by each company. This method is used commonly for PdC, Niagaran, and shallower formations.

Even more recently, wells drilled in the Antrim Shale have utilized grid systems to indicate a quarter quarter (QQ) section location. Two systems are the ‘Alpha/Numeric' grid and the ‘16' grid:

1

2

3

4

A

4

3

2

1

B

B1

5

6

7

8

C

C3

12

11

10

9

D

22

22

22

22

13

14

15

16

Alpha-Numeric Grid ‘16' Grid

By adding the grid coordinate to the section number [e.g. B1-10, C3-23, 5-10, 10-23, etc.] the well number can indicate the QQ in a specific section. These grid systems are used mostly for Antrim Shale wells.

Technology marches on: Originally, wells were straight/vertical holes. The surface hole location (SHL) and the bottom hole location (BHL) were considered to be the same. With the advent of rotary drilling, it became possible to intentionally deviate the hole away from the vertical, thereby reaching targets not accessible by drilling a straight hole from the surface, e.g. surface is a wetland, lake, too close to a residence, etc. This allowed multiple ‘redrills' of a well to different BHLs.A letter suffix has generally been used to indicate successive redrills of one surface location [e.g. original hole (straight or directional) = 1-10, first redrill = 1-10A, second redrill = 1-10B, etc.NOTE: Since the bottom hole location (BHL) of a directional well is, by definition, different than the surface location (SL or SHL), standard well numbering practice has been to number the well based on the BHL, since this represents the area being drained by the well. This becomes increasingly important, since the SHL may be in a different Section, Township, and even a different County than the area being drained by the BHL of the well.

Continuing advancement in directional drilling technology has allowed directionally drilling wells horizontally. This has led to the use of the suffix "HD" to indicate Horizontal Drainhole. HD1, HD2, etc. would indicate first, second, etc. drainholes. HD alone is often used to indicate a directional pilot hole before the horizontal portions of the hole are drilled.Additional well number suffixes have been used to indicate the specific zone of completion for Antrim wells. N=Norwood, L=Lachine & U=Upper Antrim [ e.g. HDN, HDL, HDU]NOTE: DEFINITION of "Lateral Drain Hole" (also referred to as "Horizontal Drain Hole") is as follows: "A lateral drain hole means that portion of a well bore exceeding 75 degrees deviation from the vertical and a horizontal projection within the producing formation that exceeds 100 feet".

Most recent developments in horizontal drilling technology provide for the drilling of multiple ‘spurs' off of horizontal drainholes. Using "S" as a suffix for spur, S1, S2, S3, etc. indicates multiple spurs of a horizontal drainhole {e.g. HD1S1, HD1S2 etc.].NOTE: the designation of the "BHL" of a horizontal well has become increasingly difficult to define, since the well may produce from several different quarter quarter sections simultaneously. To minimize the ambiguity of horizontal drainhole BHLs, the BHL is DEFINED to be the endpoint of the horizontal drainhole portion of the well, whether or not, that point is in the productive portion of the well.

IMPORTANT: Our computer database (MIR) allows 12 characters for well numbers, so the primary well number and all suffixes must NOT exceed 12 characters.

C. Putting it all together:

[Example 1] A well is to be located on a 40 acre drilling unit, in section 10, owned in fee by Mr. Smith: Well name & Number = Smith 1-10.

[Example 2] A well is to be located on an 80 acre drilling unit in the SE of the NW of Sec. 2, T30N, R1E, Vienna Township, Montmorency County. 40 mineral acres are owned by the State of Michigan and 40 mineral acres are owned by Mr. Jones; Well Name & Number = State Vienna & Jones B2-2 or 6-2 or 1-2 (if Company's first well in section 2)

[Example 3] A directional redrill of a well (# 1-17) drilled in the NW NE, Sec 17, 31N, 3E, Hillman Twp, Montmorency County on an 80 acre unit consisting of the N/2 NE, Sec 17. Minerals are owned by Federal Government. The well will be horizontal at its BHL in the NE NE Sec 17. Well Name & Number = USA Hillman 1-17A HD1 or 1-17A HDL.

[Example 4] (Extreme Case Scenario) A redrill of a well in Sec 21 (1-21), 29N, 1W, Chester twp, Otsego county, 80 Acre drilling unit, SHL in SW of SW, BHL in SE of SW. Minerals are owned, in part, by Federal, State of Michigan, and Mr. Smith. Well will be drilled horizontally in the (L)achine member of the Antrim Formation with one spur. The well name = USA State Chester & Smith (or USA State Chester et al.) The well number for the primary wellbore = 1-21A HDL1. The well number for the spur = 1-21A HDL1S1.

A well has one Permit Number and will have one or more American Petroleum Institute (API) numbers which indicate multiple/different segments of the well bore.

[Graphic Example] A well has State Mineral in the drilling unit, SHL in NE NW Sec 15, 29N 1W, Chester Twp, Otsego county. Well will have a directional pilot hole, HDs in Norwood and Lachine members of the Antrim formation with 2 spurs on each horizontal drainhole.

These guidelines and definitions are meant to provide a framework to help in the, often confusing, task of naming and numbering oil and gas wells. If you have any questions, please call Mark Snow, at 517-230-8233.